Metropolitan Life Insurance Company's Standards of Ethics

The Metropolitan Life Insurance Company's officersIntelligent management and energetic prosecution of
were particularly careful in the selection of their agents,the business by the new administration bore results. By
and inquired in detail as to their abilities, character, andthe end of 1871, after less than four years of
previous experience. They knew how important it wasexistence, the company had on its books more than
to look into every application for insurance, and they11,000 life insurance policies totaling almost $15,000,000
urged their agents to exercise extreme care in theof life insurance, a considerable sum for that time. Only
selection of clients.two years later the figures increased to 18,600 policies
In spite of the sharp struggle for business, thein force, and to more than $26,300,000 of business.
company emphasized and maintained high standardsThe official returns for 1873 revealed that, in the
of ethics. It cautioned agents not to offer impropernumber of policies written, the company held third
inducements or make unauthorized promises. Itplace among the 56 companies transacting business in
instructed them to stick to the printed text inNew York State. By this time, the company had
representing the plans, features, and record of thealready entered 17 States and the Dominion of
company. Agents overstepping the bounds wereCanada. Its business extended to all the States in the
reprimanded or dismissed. The officers condemnedNew England, the Middle Atlantic, the East North
the common recourse of running rival companiesCentral areas, as well as to Iowa and Missouri.
down in the wild scramble for business. ThisThis sound growth is all the more remarkable in that it
malpractice, they realized, was injurious to the entireoccurred during a period of economic and financial
institution of life insurance. They were not building forexcesses. Speculation and "frenzied finance" were
the day; they were building for the future.rampant. The post Civil War demand for commodities
It is obvious that they were also keen businessmenwas gradually letting up and prices declined as a result.
and knew that generous and fair treatment ofExcessive railway building and the too rapid
policyholders would win public recognition. Claims weredevelopment of the trans-Mississippi West had brought
paid promptly. Policies were "registered," i.e.,about a glut of foodstuffs and thrown older areas out
countersigned by the Insurance Department, indicatingof cultivation.
that a special fund was deposited by the companyA sudden crisis developed which broke into the lavish
and held by the State as security for the payment ofprosperity of the country and was immediately felt by
policies when they became due.all insurance firms. Partly owing to deficiencies of
In order to gain official confirmation of its soundmanagement, accentuated by the general economic
financial status, the company requested ancrisis, no less than 22 life insurance companies in New
examination by the New York State InsuranceYork State had ceased business in the six years
Department. In 1871, after such an examination, theending with 1873.
Superintendent of Insurance, George W. Miller, statedIt must not be assumed, moreover, that the
that the life insurance company was managed withMetropolitan's early success was achieved without
"integrity, energy, and ability, and concluded with themany difficulties or that it continued indefinitely. The
following words: "From the thorough personaltask of building a functioning organization and a Field
examination made, 1 am satisfied that the condition ofForce was an arduous and expensive one. Competent
the company is such as to entitle it to the confidenceagents were difficult to find. Many of the men
of the policyholders and the public."engaged produced insufficient business, and a
Similarly, The Baltimore Underwriter, in referring to theconsiderable number of the applications submitted
business of 1872, wrote:were on questionable risks.
"In its issue of 8,642 policies last year, the steadyIn spite of every effort, the lapse of life insurance rates
augmenting of its receipts, the economy ofwas high, reflecting the adverse business conditions
expenditure, the character of its assets, its watchfulwhich were gripping the country. As the depression
management, its large membership, the rigid scrutiny ofdeepened, insurance company after insurance
its risks, the public apprecia¬tion of its distinctivecompany went to the wall. Of the more than 15 life
plans of insurance, etc.-in all these, we say, is theinsurance companies incorporated in the State of New
assurance that whatever solid life assuranceYork in the three year period of 1866 to 1868, the
contemplates the Metropolitan is abundantly able toMetropolitan alone survived.
supply."